First Milk management looking to change way co-op is run

First Milk management looking to change way co-op is run

First Milk has set out changes to the way the UK dairy co-operative is run, the latest in a series of measures to try to improve its performance.

The company plans to reduce the number of directors from nine to seven and have an independent "commercial" chairman heading the board.

It has also proposed replacing its group of 13 area representatives with a seven-member council, which will also have an independent chair "with commercial experience" to hold the board to account.

Outgoing chairman Sir Jim Paice, the former UK government minister, announced in June he would step down from the role as First Milk. Announcing his plans to leave the co-op, which was being buffeted by the slump in global milk prices, Paice said the company had to see "significant change in the constitution of the board", which he said needed "more people with real commercial and business skills".

Paice said yesterday (26 October) the proposals would "significantly strengthen the governance" of First Milk and "make the business more robust for the future".

Chief executive Mike Gallacher, who joined First Milk in March, added: "Establishing a new board structure with significant commercial experience will ensure that the co-operative avoids some of the pitfalls of recent years and hence can provide the best possible return to farmer members. This change continues the pace of transformation at First Milk which has included the setting up of business units within the group, significant restructuring, a step improvement in the financial transparency of the business and a drive to focus on our core cheese and liquid contracts businesses."

The new structure will be put to First Milk's members "over the coming weeks", the company said.